Piracy setback shows power of tech lobby

Showbiz an Obama ally, but he has others too

When the White House announced over the weekend that it had serious problems with a major piece of antipiracy legislation pending in the House and the Senate, it dealt a setback to efforts to pass sweeping measures to combat online copyright infringement.

But it also reflects a reality for the Hollywood lobby: It must contend with an increasingly influential Internet sector, one with potent means of making its voice heard in Washington.

The White House on Saturday announced that it could not support antipiracy legislation that “reduces freedom of expression, increases cybersecurity risk or undermines the dynamic, innovative global Internet.”

In a blog post, three administration officials specifically cited measures in the legislation in which domain names of sites that traffic in infringing content could, by court order, be blocked. They said that such measures “pose a real risk to cybersecurity and yet leave contraband goods and services accessible online.” They also raised concerns about other provisions, including one that allows copyright holders to take their own action to stop ad networks and payment processors from supporting foreign sites devoted to selling pirated material.

Politically, President Obama is caught between two sectors that have been a big base of support yet are largely at odds on the legislation: Hollywood and Silicon Valley. Obama faces a potential problem if legislation reaches his desk that is still polarizing, particularly to many of the so-called netroots that proved such a boon to his campaign in 2008 and have been rallying against the legislation. MoveOn, for instance, has been sending out emails calling on members to protest.

Huge amounts have been spent. According to the Center for Responsive Politics, TV, movie and music businesses spent $92 million on lobbying in 2011, but computer and Internet firms spent $93 million. The lobbying activity includes all forms of advocacy, but the legislation has been front and center in D.C. in recent months.

Industry trade groups, including the MPAA and the RIAA, had every expectation that the Protect IP Act and a companion bill in the House, the Stop Online Piracy Act, would pass with broad bipartisan support, and that President Obama would sign it. The legislation also won the support of most of Hollywood’s unions and guilds as well as of two groups that are normally foes: the U.S. Chamber of Commerce and the AFL-CIO.

Yet the lobbying effort, while successful in lining up influential lawmakers of both parties on Capitol Hill, ran up against fierce opposition from Internet firms, as well as from public interest groups and Internet activists.

Past antipiracy legislation has run into turbulence, but often the provisions have been so complex that it was difficult generating much public interest beyond D.C. policy circles and the industries involved. This time, it has

generated public interested, and often with alarm. Lawmakers have been flooded with emails and letters, and some of the Republican presidential candidates have been queried about their stance on the issue on the campaign trail.

While the entertainment industry last fall launched a group called Creative America, designed to drum up grassroots support for the bills with a message of saving jobs, that effort has been overshadowed by opponents’ message that the legislation would threaten the Internet as we know it, a campaign waged largely online via blogs, emails and social media. Some sites, like Wikipedia, were considering “blackouts” in protest, and in an extreme case, the hackivist group Anonymous reportedly posted private information about CEOs of major media congloms.

The Hollywood lobby has decried what it says is a misinformation campaign about the bills. MPAA chairman Chris Dodd even compared it to the battle over health care reform and Wall Street reform, two pieces of legislation so complex that they were far easier for opponents to attack than for supporters to explain. An MPAA official said last week that if anything, the experience over the legislation showed the need for a much more aggressive and long-term public information campaign on the importance of protecting intellectual property.

The legislation is not dead. The three administration officials who wrote the blog post — Victoria Espinel, intellectual property enforcement coordinator; Aneesh Chopra, U.S. chief technology officer; and Howard Schmidt, special assistant to the president and cybersecurity coordinator for the national security staff — did not specifically say that Obama would veto the bills, and they called on Congress to take some kind of action.

They added that the administration “calls on all sides to work together to pass sound legislation this year that provides prosecutors and rights holders new legal tools to combat online piracy originating beyond U.S. borders while staying true to the principles” outlined in their statement.

But the question is whether a bill that lands on Obama’s desk will have much teeth.

Mitch Glazier, senior exec VP of the Recording Industry Assn. of America, said that the org would continue to work with lawmakers, but added, “It’s time to walk the walk — legislation is of no benefit, nor will we support it, if it allows the leading Internet companies to direct law-abiding consumers to unlawful and dangerous sites.”

Michael O’Leary, senior exec VP for global policy and external affairs at the MPAA, said that “now is the time to stop the obstruction and move forward on the legislation.”

“While we agree with the White House that protection against online piracy is vital, that protection must be meaningful to protect the people who have been and will continue to be victimized if legislation is not enacted,” he said.

House Judiciary Chairman Lamar Smith (R-Texas), who introduced the bill, already announced on Friday that he would remove the domain-name blocking provision. In a statement on Saturday, he said that he now believes the legislation “meets White House requirements.” Although the provision remains in the Senate version of the bill, Senate Judiciary Chairman Patrick Leahy (D-Vt.) said that he would recommend that it be studied further before implementation.

Still, Internet firms say they have problems with the legislation even with the domain name provision removed. Markham Erickson, the executive director of the Net Coalition, a group of Internet companies including Google, Facebook and Twitter that have been opposed to the legislation, said that the administration’s statement was “welcome news.” He added that House Majority Leader Eric Cantor has said that the legislation would not go to the floor of the House “without consensus.”